Opponents hint they may sue
The Escondido City Council Wednesday night decided to make book on a private-contractor with a somewhat spotty record, Library Systems & Services, to run the Escondido Public Library. The council majority argued they will save the city $400,000 a year, and that the contract offers an iron clad escape clause if LS&S underperforms.
The vote for the library outsourcing was Sam Abed, John Masson, Ed Gallo and Mike Morasco, with Olga Diaz voting no.
Meanwhile, opponents of LS&S hinted they will turn to a well-known activist attorney, Corey Briggs, and might sue to block the contract. One opponent claimed to have collected 4,000 signatures on a petition opposing the action.
Deputy Mayor John Masson pointed out that the beloved Escondido Library Board of Trustees, which voted unanimously to oppose the contract, will actually have MORE power under this arrangement because it will set policy that LS&S will have to follow. He urged library lovers to support the contract as providing a pathway to the “library of the future.”
LS&S will do nothing more than operate the library. It will not own its books or archives, and will buy new books and maintain the existing collection under Board of Trustee scrutiny.
The panel voted after listening to two hours of testimony where not one speaker spoke for the contract. Unlike the August meeting, when City Hall was packed to overthrowing, the crowd, while substantial, was not overwhelming.
As the opponents glumly filed out of the council chambers, Laura Hunter, head of the Save Our Library Coalition tried to get a chant started: “Hey hey! Ho, ho! Sam Abed has got to go!” without much success. After a moment, the chant deflated.
The Financial Report
At the beginning of the meeting City Attorney Michael McGuinness gave a financial analysis of the proposal. He noted that the Library Board of Trustees had voted unanimously to oppose the outsourcing and reminded the council that on August 23 they instructed staff to negotiate a contract with LS&S.
The contract covers, 1. the professional services agreement and, 2. The scope of work, including requirements LS&S will be required to achieve. It is a ten-year contract with options to renew every five years.
One thing different from the current arrangement is that the Library Board of Trustees will make decisions and review how the contract is being carried out.
“That is an important part of what it is trying to accomplish,” he said.
The contract does not include any guarantees that any present staff will be offered employment, but McGuinness said LS&S has said it intends to offer jobs to all staff members at their current salaries and titles. The contractor will save money because it won’t be required to fund those employees CalPERS retirement as public employees.
What McGuinness called “the centerpiece” of the contract is the requirement that LS&S create a “strategic plan” for the library that would include a way forward to convince the public to support a new library at Grape Day Park.
The contract includes an extensive “out” from under the contract under these three circumstances:
1. If they breach the contract, the city must give them 30 days to cure the problem, at which time the city can cancel the contract.
2. If the city council reviews its budget and decides not to approve funds the contract, it will be terminated.
3. If CalPERS determines that, despite the fact that LS&S is hiring the library’s employees, that they still qualify as city employees, the city may terminate.
He noted that if the city calls out LS&S for some aspect of the contract that it is not fulfilling, that LS&S may not charge the city to fix the problem.
With an obvious nod towards the criticism of many that LS&S has a history of not being transparent about its finances, McGuinness said, “We have a right to audit their records.”
He noted that LS&S’s contract obliges it to accomplish its goals without relying on volunteers. “That doesn’t mean volunteers can’t participate,” he said, and the contract includes an official whose duty it is to coordinate the volunteers.
This is an issue because, due to the bitterness of the library fight, many volunteers have said they plan to refuse to volunteer to increase the profits of a corporation.
LS&S must at a minimum meet circulation statistics from the previous year, said McGuinness.
“This strategic plan allows the public to get involved in putting together measurable goals,” and will include a plan for a successful library bond measure, said the city attorney. “Not only must LS&S develop a strategic plan, it must implement it,” he said. And, the city must be satisfied with the results.
LS&S must provide staff development and create an effective working relationship with the city, library board and public, he said.
It must staff the library 60 hours a week, including opening the facility on Sundays. It will employ 18 fulltime and 19 part-time employees.
The city is offering a severance package of $2,600 and references to library staffers who don’t accept LS&S’s offer of employment, said McGuinness. Employees who choose that route must sign a waiver release.
He said LS&S has met with library staffers several times to talk about their options. The city has asked CalPERS to review the contract and rule on the question of whether the employees would still be considered as city employees, in spite of working for a private corporation.
McGuinness added his opinion “Library employees will not be common law employees.” The Common Law test is used by the IRS to determine if a worker is classified as a worker or an independent contractor. If, however, CalPERS rules otherwise, that would be cause for the city to terminate the contract.
McGuinness addressed some objections brought up by attorney Roy Garrett, who sent the city several letters about the contract, as well as his oft-repeated statement that the city does not have authority under California law to give its management up, because by statute the Library Board of Trustees is given that authority.
McGuinness has largely dismissed Garrett’s argument, although he gave Garrett credit for raising several issues that, McGuinness said, helped make the contract more advantageous to the city.
In his opinion, California law supports the city council’s ability to contract the library’s management to a private firm.
McGuinness added that a 90-day delay has been added to the resolution, giving the city time to respond if Corey Briggs represents the library outsourcing opponents. He advised the opponents to talk to him first. “If they think they have some action against the city—come and see me first,” he said.
Briggs is possibly the most controversial attorney currently practicing in San Diego County. He has sued various governmental agencies repeatedly over alleged CEQA violations and is both a hero of crusading environmentalists and a bugaboo of people who claim that he will sue at the drop of a hat.
City Manager Jeff Epp followed McGuinness. He declared, “During the course of negotiations for a ten year we are talking probably a $1.3 million savings over the course of the ten years.”
Councilmember Olga Diaz asked McGuinness and Epp to address Garret’s charge that the city would have to pay $500,000 to withdraw from the contract. McGuinness said that is a misinterpretation of the contract. The $500,000 only comes into play if the city violates the contract by withdrawing from without meeting any of the circumstances listed above.
“If we terminate under those three provisions, we don’t owe them a thing,” said the city attorney.
Diaz grilled the city attorney and Epp about how citizens would get redress if they have complaints.
“When we don’t like something or when a member of the community complains, where does that go?” she asked, saying it is not spelled out in the contract.
McGuinness said they would expect that if someone has a complaint, they would first try to resolve it with LS&S and then take their complaint to the Library Board of Trustees, or eventually, the city manager.
Diaz added that she was concerned about “handing over information on patrons to LS&S.”
McGuinness replied that LS&S is just as obligated to protect such information as the library has always been.
Under further questioning, McGuinness conceded that, although LS&S promised to take on all of the library staff at their current salaries nothing would prevent them from later reducing those salaries. “They are independent contractors,” he said.
“That struck me as a strange thing to put in a contract because they wouldn’t put it in if they didn’t intend to use it,” said Diaz, who then asserted, and continued to assert, “I feel like this contract is not ready.”
During the testimony, each was limited to two minutes. Mayor Sam Abed admonished the audience not to applaud after speakers as this would take up time.
Glen Vecchione, author of 30 children’s books, said he was proud that his books are on the shelves of the Escondido Library. “I love the library because the people who work there love the library,” he said.
A woman said it seemed that the council was not exploring options besides contracting with LS&S. She predicted, “The same people who oppose this will be just as vehement in opposing a bond. I don’t want my money lining the pockets of an East Coast corporation.”
Liz White, in an action that was repeated so often audience members appeared to pop up and down every few minutes, declared, “I’m standing up for the Escondido Public Library!” at which opponents of outsourcing jumped to their feet.
She talked about speaking to attorney Corey Briggs, and called the contract, “a corporate giveaway.”
Another woman declared, “This is so wrong. The library is the heart of the town.”
A man said nothing prevents LS&S from reducing the library employees to minimum wage.
Roy Garrett declared, “We are taking a risk of ruining our library, but we will blame you.”
Another complained about the “one-sided way the information has been presented.”
“Professional standards will be compromised because their employees will not be as qualified,” said one.
Pamela Hammonds asked, “Will they determine what I’m able to read? I’m concerned about that.”
Brenda Townsend asked, “How will our collection change? Will it change? Who is in charge of this? This is not a small detail.”
Ron Forster admonished, “Do not let a spreadsheet make a decision.”
A woman asked, “Is there an exit strategy from this contract? Once your staff is gone, it’s gone.”
During the council discussion, the issue of how much the city saves from LS&S’s ability to buy books in bulk came up.
“You can buy more books with the same amount of money,” said a representative of the company. He noted that LS&S spends $7 million annually on books, compared to several hundred thousand dollars that most large library systems spend.
Council member Mike Morasco said he asked the city to explain why it went with a ten year, rather than five-year contract. He was told LS&S was willing to charge less per year for a ten-year contract, and that the savings over ten years amounts to more than $1 million.
Council member Ed Gallo declared, “We are not giving away the library. The only thing we will give up ownership on is the employees.” Alluding to the increased authority of the Library Board of Trustees, he said, “Your meetings will be longer now.” He added, “You can’t make a foolproof contract, but I trust the math of our staff.”
He said sooner or later the city would have to face making budgetary decisions such as this. “We can face the status quo for two or three more years. But I cannot as a steward of your money turn down a $400,000 a year savings.” He added, “My job as a city councilmember is to watch where our money goes. I’m all for giving this a try.”
Masson credited library outsourcing opponents for their passion, but said, “I feel like I have passion for our library.” Building a new and better library, “is my vision for the future.” He said the contract, “addresses all of my concerns. We will elevate the library and take it to the next level and a year from now we will all be happy.”
He added that he liked the fact that under the contract, “The board of trustees will be in charge. I view this as a true partnership. We are going to have input. I have faith in this corporation that they are going to help us make it happen. We have everything that we need as a community to be a success. All we need is the community to get behind it. We have the opportunity to elevate our brand.” He concluded, “I’m looking forward to expanding our library and expanding our services.”
Diaz acknowledged the “hundreds of library advocates. I wish your city had offered a public process worthy of you.” She thanked Garret for his letters that pointed out that the Board of Trustees has ultimate authority over libraries.
She declared, “This contract isn’t ready. You didn’t add enough protection for the city. I don’t think the savings will happen. The volunteers have been clear about their disillusionment and donors have said the same. We failed to seek other options.”
She said she had hoped to see a new library, but said she was now skeptical. “If we replace our real librarians with those less qualified, it will show. I won’t support this contract. I find it misguided.”
Mayor Sam Abed concluded, “I believe all of us share the same passion. We are trying to make the library sustainable.” Not only would the city see a savings of $400,000 from its contract with LS&S, but it would also save $1 million a year in expenses, he said.
He said the city was reacting to the critical County Grand Jury Report on the library’s inadequacies. “This is an opportunity to make our library better. I don’t care about how much profits LS&S makes, I do care what they save the city.”
He reiterated that the city faces a $40 million deficit from its pension obligations in the next four years. “This option will secure the library’s future for the next four years.”
He said what worried him the most was paying fire and police in the future. “We have given the community every assurance we can. If this doesn’t work we will end the contract.”